BIS Chief Calls Stablecoins Unfit for Scale. Much of the World Is Already Proving Otherwise.
The head of the Bank for International Settlements told central bankers gathered in Wyoming this week that stablecoins cannot reliably function as a payment system at significant scale, pointing instead to tokenized deposits as the more credible path forward.
The head of the Bank for International Settlements told central bankers gathered in Wyoming this week that stablecoins cannot reliably function as a payment system at significant scale, pointing instead to tokenized deposits as the more credible path forward. The statement carries weight in policy circles, but it lands at a moment when stablecoin adoption across Africa and South Asia is accelerating at a pace that few institutional frameworks have caught up with.
Pablo Hernández de Cos, who took over as BIS General Manager in July 2025, made the remarks Thursday at the Jackson Hole Economic Symposium in Wyoming. The annual gathering of central bank officials and economists has historically focused on monetary policy. This year's theme, "Financial Innovation: Implications for Payments and Policy," put private digital money directly on the agenda for the first time in the conference's 49 editions.
What the BIS Is Actually Arguing
Hernández de Cos did not reject blockchain technology outright. His critique targets stablecoins specifically, arguing that they fail a standard the BIS calls the "singleness of money." The principle holds that all forms of money within a system must be exchangeable at equal value to prevent fragmentation of the monetary system. Stablecoins, the BIS contends, circulate as bearer instruments that can trade below their pegged value in secondary markets and do not ultimately settle on central bank balance sheets. "Stablecoins do not credibly function as a means of payment at scale," Hernández de Cos said in remarks reported by CNA Business.
His preferred alternative is tokenized deposits: digital versions of standard commercial bank deposits that run on permissioned networks and settle using central bank reserves. "Tokenized deposits offer a more compelling case to harness the benefits of this new technology," he said. The BIS is already piloting this model through Project Agorá, a multi-central bank initiative testing whether tokenized commercial bank money and tokenized central bank reserves can share a programmable platform for wholesale cross-border settlement. Those arguments land against a consequential regulatory backdrop: the United States already has a federal stablecoin framework in place, after the GENIUS Act was signed into law by President Trump in July 2025, establishing the first formal US federal regulatory regime for stablecoins. That the BIS is questioning stablecoin viability while the world's largest economy has already codified rules for them illustrates the breadth of the current institutional divide.
The Numbers Behind the Skepticism
The global stablecoin market sits at roughly $308 billion in total capitalization as of August 2026, up about 14.3% from a year ago. Measured by issuer, Tether's USDT holds approximately $187 billion, representing 59% of the market. Measured by blockchain network, Ethereum-based stablecoins account for about $157 billion, or roughly 50.69% of on-chain stablecoin value. These two figures represent different analytical lenses on the same market: USDT itself circulates across multiple chains, including Ethereum and Tron, so the figures are not additive segments and should not be read as such. Circle reported that USDC processed $21.5 trillion in on-chain transaction volume during the first quarter of 2026 alone, a 263% increase year over year. The BIS 2026 Annual Report acknowledges this growth but flags that stablecoins represent a significant share of illicit on-chain activity, citing unhosted wallets and pseudonymous transaction flows alongside gaps in KYC and anti-money laundering compliance as structural weaknesses.
A Different Reality in the Global South
The BIS critique is built around wholesale, systemically significant settlement infrastructure. The ground-level reality in large parts of Africa and South Asia is considerably different.
Nigeria accounts for 60% of stablecoin inflows across Sub-Saharan Africa since 2019, and an IMF assessment published in June 2026 confirmed that stablecoins have become a meaningful cross-border payment channel for Nigerian households and small businesses. Across the continent, 79% of crypto-active users hold stablecoins, the highest rate of any region globally, according to the Milken Institute's Global Digital Asset Adoption report. A Mercy Corps Ventures pilot in Kenya found that routing freelancer payments through stablecoins reduced transaction fees from 29% to 2% for international micro-transactions. At the Accra Stablecoin Conference in July 2026, Bank of Ghana official Sharon-Rose Lithur framed the question plainly: "The question is not whether stablecoins are being used for cross-border value. They are. The more important question is how we bring that activity under a framework that preserves financial integrity."
In South Asia, stablecoin-driven volumes across India, Pakistan, and Bangladesh grew 80% to $300 billion in the first seven months of 2025, the most recent period for which regional data is available. Pakistani workers in Gulf countries have been routing an estimated 3 to 4% of their remittances through USDT and USDC amid regional geopolitical uncertainty. Pakistani regulators approved a regulatory sandbox for stablecoin remittance providers in late 2025, with three providers cleared for pilots. In India, USDT reportedly trades at a 4 to 5% premium over official exchange rates, according to blockchain analyst Anndy Lian, signaling demand that formal channels are not meeting.
An Institutional Split Worth Watching
One notable subplot is the divergence between the BIS as an institution and its former leader. Agustín Carstens, who headed the BIS until mid-2025 and was one of crypto's most prominent institutional critics during his tenure, has softened his position significantly since leaving. Speaking at the Point Zero Forum in June 2026, Carstens said he had come to appreciate what stablecoins can do for financial innovation, financial inclusion, and cost reduction. He added that global regulatory coordination for stablecoins is "lagging behind," a pointed observation from someone who shaped BIS policy for years.
What Comes Next
Analysts expect the Jackson Hole remarks to shape central bank positioning across emerging markets, particularly in countries that look to BIS guidance when drafting digital finance regulation. For developers and fintech builders working on stablecoin payment rails in Africa and South Asia, the practical implication is tighter scrutiny ahead, especially around KYC and reserve transparency. The tokenized deposit model the BIS champions requires incumbent banking infrastructure that is absent or unreliable across much of the regions where stablecoins are growing fastest. Project Agorá is a legitimate long-term experiment, but it is a wholesale interbank tool, not a substitute for the remittance apps and merchant wallets that hundreds of millions of people in the Global South are using today.